Central banks act as economy hits ‘dangerous new phase’

Five central banks have announced a co-ordinated move to try to help the financial system, as the boss of the International Monetary Fund warns of a “dangerous” new economic phase.
The central banks are to provide commercial banks with three additional tranches of loans to help ease funding pressures.

Banking stocks rose sharply, with BNP Paribas up as much as 22%.
IMF managing director Christine Lagarde said “bold action” was needed.
Speaking in Washington, she said: “Uncertainty hovers over sovereigns across the advanced economies, banks in Europe, and households in the United States.

“Without collective, bold, action, there is a real risk that the major economies slip back instead of moving forward.”

She added that the debt woes in the eurozone also risked harming economies in the developing world.

“If the advanced economies succumb to recession, the emerging markets will not escape,” said Ms Lagarde.